D.C. Buzz: The Himes redemption

WASHINGTON — Regulating the financial-services industry has always been a double-edged sword for Rep. Jim Himes, D-5. He entered Congress in 2009 as an expert on the hidden intricacies of Wall Street, thanks to his 12 years at Goldman Sachs.

Once on Capitol Hill, he enlisted in the House Financial Services Committee and went to work helping to draft the Dodd-Franks law, authoring the section that trimmed the sails of the derivatives industry.

The hedge-funders — a significant part of his Fairfield County constituency — were not happy with him.

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Since then, he’s cast a fair number of votes tweaking Dodd-Frank in ways that upset his not-inconsiderable liberal constituency.

Fast-forward to December 2019: Himes is the No.-2 Democrat on the House intelligence committee, a regular fixture on cable news and highbrow newspaper outlets as impeachment of President Donald Trump draws nigh. He could be forgiven for serving up a shrug in response to the question: “Whatever happened to your interest in Wall Street reform?”

But on Thursday, Himes won himself a sliver of redemption when the House passed his Insider Trading Prohibition Act by a vote of 410-13. Yes, you read that right — 410-13. And this bipartisanship unfolded in a major food-fight era on Capitol Hill over impeachment.

The bill’s popularity may be due to its practical purpose: Resolving a slew of conflicting court decisions by running a codification thread through them all, linking the good and logical and discarding the unwieldy and illogical.

I won’t put you through the high-weeds of the pinball game that’s taken place in the courts, particularly in the past 5 years or so as insider-trading cases grabbed bigger and bigger headlines. Much of the controversy revolved around whether the provider of the inside information _ the tipper _ has to receive material benefits (like cash, a lot of it) in order to get convicted of insider trading.

The Himes bill “makes it unlawful for a person to trade while aware of material, non-public information if that person knows, or recklessly disregards, that the information was obtained wrongfully, or that making that trade would constitute a wrongful use of that inside information.” And that’s just from the easy-to-digest press release!

In any case, it sketches out a dividing line over the relationship between tipper and tipee, what’s kosher and what’s not.

But if you call your broker after overhearing someone at a bar who got insider information from some guy at the gym, well, you might be OK.

In any case, it’s a possible legacy item for Himes, a way to beat back those “which side are you on?” demons. And lest you think Connecticut is anything but a major player in this world, consider this from the Connecticut Hedge Fund Association: Connecticut is home “to over 400 private investment funds, managing over $750 billion in assets. CT is the 3rd largest domicile for hedge funds globally and ranks #2 in the world for large funds managing $1 billion or more.”

The bill “will help bolster faith in the fairness of the system for American investors and let potential wrongdoers know exactly what behavior will cross the line,” Himes said.

It may well die in the Senate, with Senate Majority Leader Mitch McConnell, R-Ky., not particularly eager to take up anything non-routine coming out of the House. But given the bipartisan vote in the House, the insider-trading bill arguably stands a better chance of Senate consensus.

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NOW PLAYING, ‘THE MALTESE PROFESSOR’

So it appears that Connecticut U.S. Attorney John Durham and his Godfather, U.S. Attorney General William Barr, may not be on the same page after all. Durham, you will recall, got drafted by Barr to look into whether the FBI had sufficient cause (“predicate” for you legal scholars) to initiate an investigation into Russian efforts to influence the Trump campaign and help the now-president defeat Hillary Clinton in 2016.

And, of course, this investigation led to the firing of FBI Director James Comey, the appointment of special counsel Robert Mueller, and the cascading brouhaha that has now morphed into President Trump’s July 25 phone call to Ukrainian President Volodymyr Zelenskiy _ and the full-throttle House impeachment inquiry.

The apparent disagreement between Barr and his disciple, once a stalwart career prosecutor in the U.S. attorney’s office in New Haven, centers on a mysterious Maltese professor named Joseph Mifsud, who is now in hiding.

Barr and Durham reportedly took a trip to Rome to enlist Italian intel in helping them find out about Mifsud and locate him.

George Papadopoulus, the hapless Trump campaign foreign policy adviser, cited Mifsud as his source for his understanding that Russia had hacked the DNC computer (and that of veteran Dem operative John Podesta), and had email dirt on Hillary.

Papadopoulus bragged about it to an Australian diplomat, who forwarded it the FBI. Ultimately the tip blossomed into the Trump-Russia investigation that might yet resurface in the impeachment proceedings, even though Mueller closed it with no criminal consequences for Trump.

Papadopoulus eventually pleaded guilty to lying to the FBI and was sentenced to 14 days in prison. Case closed.

But Mifsud’s disappearance has given rise to a cottage industry of conspiracy theories about him, the most relevant one now being that he was a plant of Western intelligence (think CIA) to provide information to Papadopoulus that would trigger Trump’s downfall.

So it was a front-page story in the Washington Post this week when reporters there found out that Durham had told the Department of Justice inspector general (whose own report on the “predicate” is to be released in full on Monday) that Mifsud did NOT work for the CIA or any other Western intelligence service.

Barr, who served as attorney general under George H.W. Bush, has been unabashed in his suspicion that the genesis of the Trump-Russia investigation rested on thinly sliced baloney. He told CBS News in May that some of the elements of the Russia case “don’t hang together with the official explanations of what happened.” He didn’t elaborate.

And earlier this week, according to the Post, Barr told colleagues he disagrees with the DOJ inspector general’s conclusion that while mistakes were made along the way, the FBI had sufficient reason to open the investigation.

So the jury remains out. But this leaves me, among other things, wondering who will play Durham when the movie of this whole episode inevitably gets made? William Hurd with some added facial hair is a strong possibility.

And the title? Of course, with apologies to Dashiell Hammett and Humphrey Bogart, it has to be “The Maltese Professor.”